Keep in mind that most participants in the futures markets are speculators who usually close out their positions prior to a date of settlement and, for that reason, most contracts do not usually last until the date of delivery.
The primary difference between currency futures trading and spot FX is if the trading price is determined and once the physical exchange of the actual currency occurs. With futures, the price is determined when the currency pair is exchanged about the delivery date, which is usually sometime inside the distant future.
In the spot FOREX TRADING market, the price is also determined in the point of trade, but the physical exchange from the currency pair takes place right in the point of trade or within a brief period of time thereafter.
Since 99.9% of traders do not take delivery of the real currency and offset their sales or purchase before delivery comes about there is very little difference between the two methods of trading values. While there are small regulatory differences, commission differences and propagate differences, the main characteristics of trading currencies remains identical.
Currency futures contracts as well as FX contracts trade similarly to other stock and futures markets and the majority technical analysis methods work with currency markets precisely the same as with other stocks and commodity markets. There's only one exception and it is a big exception, currency contracts usually trend substantially more than many stocks and commodity markets. Back testing results show in which currency contracts trend about 55% of times. Other markets such as share indexes, precious metals and bonds only trend about 30% about the average.
Believe it or not the biggest reason why people stay away from futures contracts happens because they have trouble determining the way to calculate the correct values with regard to price changes and fluctuations. Unlike stocks which have been calculated using simple dollars and cents share prices, each futures contract includes a different contract size and just about every tick value or minimum price fluctuation. Once the minimum tick value is understood traders will start analyzing currency futures contracts the same way they analyze different shares. Here are the tick values per futures currency contract you should know about.
The other major difference between the currency markets and most other financial markets may be the opening and closing hours. Most financial markets use a set opening time and a collection closing time. The currency markets never close and trade night and day in order to provide logical exchange rates to banks worldwide.
Since currencies trend substantially over other financial markets, it would seem sensible to utilize trend following as well as momentum style indicators when analyzing the forex market. Two indicators that work well with forex market are Exponential Moving Averages and MACD Momentum Oscillator.
Tomorrow I most certainly will go through several examples showing you the way to apply both indicators to currency futures trading and the way to tweak the settings to make the indicators respond best.